An investigation into animal cruelty in Indonesian abattoirs has recommended action be taken against two Australian exporters.

The Department of Agriculture launched an investigation in February after ABC1's Lateline aired footage of animal cruelty in Indonesian abattoirs, including images of workers slitting the throat of a fully conscious steer.

The video was shot by Animals Australia at four abattoirs in Indonesia earlier this year.

The report found two of the abattoirs had been approved under the Government's new welfare system, which was introduced after trade was suspended with Indonesia last year.

Department secretary Phillip Glyde says action will be taken against exporters North Australian Cattle Company and International Livestock Export.

"There were two Australian exporters who had breached the new export supply chain assurance system that was put in place by the Government last year," he said.

Mr Glyde says the exporters should have made sure the animals in their supply chain were treated humanely in Indonesia.

"The action that the regulator has taken is to remove those two abattoirs from the supply chain of the two exporters," he said.

"The second thing was to require those two exporters to have animal welfare officers present in all of their remaining abattoirs in their supply chain and the third this was to increase the intensity of auditing."

Agriculture Minister Joe Ludwig says the investigation should be a wake-up call to anyone found to be involved in animal cruelty.

"This new system provides the checks and balances the community expects for this trade," he said.

'Pay the price'

Prime Minister Julia Gillard says the two export companies will pay the price for doing the wrong thing.

Speaking in Darwin today, Ms Gillard said that, in any system, there were always going be people and organisations who did the wrong thing.

"We have put in a place a whole new system which now tracks and traces where animals go, and what has happened is that system has worked," she said.

"We have been able to identify the abattoirs in which animals were mistreated and the exporters of those animals.

"This is what we wanted to achieve out of the new system for live animal exports."

However, the Greens animal welfare spokeswoman Lee Rhiannon says the report contains further evidence the live export trade should be banned.

"The Government's commitment to clean up the live export trade is in tatters with today's news that two of the abattoirs where cruel practices occurred were Australian accredited," she said.

Lyn White from Animals Australia says the breaches show the new regulations are not working and 37 breaches resulted in "terrible suffering".

"We're talking about animals not being dead or not being checked before they are dead before workers are cutting them up," Ms White said.